Market-Based Strategies to end the Forced Labour of Migrant Workers in Asia

Portrait of a GroundBreaker: Scott Stiles

Scott Stiles is the Co-Founder of the Fair Employment Agency, a non-profit employment agency setting the industry standards for the hiring of domestic workers in Hong Kong. Scott is also the CEO of the Fair Employment Foundation, where he leads market-based strategies to end the forced labour of migrant workers in Asia. This work centers around three critical market interventions: influencing employment agencies to operate more ethically, influencing training centres to provide better training, and enabling employers to influence the market through increasing the demand for ethical employment practices. On this week’s feature of GroundBreakers’ Portraits of a GroundBreaker Series, our discussion with Scott ranged from the key elements of the Fair Employment Agency’s success and the future of migrant labor globally.

What motivated you to start the Fair Employment Agency?

I came to Hong Kong on an internship in 2012 and that experience was my first time outside of the U.S. I was working for a small NGO that my brother in law, David Bishop, had started that was recycling soap for hotels. During my time there, I was exposed to the problems that domestic workers face.

Domestic workers are doing everything that they have been told they need to do to be successful and the system is not working for them. They’re are coming from situations of poverty and taking risks. Having never left the U.S. until that point, I had always had this idea of the American dream and people working their way up by “picking themselves up by their bootstraps.” The reality is that there are over a billion people who don’t have the opportunity to do that no matter how hard they try. We need fundamental structural change for these systems to work better for them.

After the internship in Hong Kong, I went back to university and I wrote up a business plan for an ethical employment agency for domestic work. Our aim is to push the bad players out by beating them at their own game and being a better service provider than them. The three-cofounders, Tammy Baltz, David Bishop, and me, came together. A couple years later we defined our strategy with our theory of change being, “Best. Biggest. Influence. Impact.”

The idea is that we need to be the absolute best service provider, meaning that we need to vet workers and employers to make sure we’re only putting people together that can be successful long term. We are looking out for the interests of multiple players. If we set up an employment agency and only focused on workers in the most desperate situations with the saddest stories, we wouldn’t be looking out for our employer’s interests either. They wouldn’t have good experiences with us and then we wouldn’t be able to be market changing because only a very small percentage of employers would want to use our service.

Becoming the best will then allow us to become the biggest. Becoming the biggest means that by placement numbers, we are one of the biggest agencies in Hong Kong and that has happened over the course of the last four years. For Filipino workers, we’re one of the top five biggest agencies in Hong Kong right now. The business has grown which will allow us to have influence over the market. This means that some businesses will follow our pricing and also paves the way for cooperation with the government which then leads to impact. The idea is to set the market standard and then build from there using great service and a great customer experience.

What advice would you give to young people who want to become social entrepreneurs?

My advice is to go to the action side, not the support side. I think there’s so much opportunity for us to do good by digging in and trying to take social problems head on. There are lots of resources and a lot of groups that are providing support but not enough that are taking individual problems head on and working on them. It’s also important to be an expert on a problem through digging into an issue and trying to be the absolute best on it. There’s this current trendy notion in the social innovation space that a new app will change the world. The reality is that most problems are more nuanced and complex than that.

It’s also important not to let yourself get too much credit or outward recognition early on. I still feel like I’m very early on in this process and it’s only been four years since we’ve been operational. It’s important to be slower to go public with what you’re working on. Sometimes people have the tendency to share about their work before they really get it off the ground for an ego boost because everyone will declare them a hero. The reality is that we can’t let people get too much credit too early on. These problems are big and complex and if we tell people they’ve been successful and won the battle when they’re only six months into it, we’re sending the wrong messages. We have to focus on the complexity of these challenges.

“When we look at our success, it’s so important to look at the people we’ve had. The key element about our story is that we’ve always had the right people at the right time. We’ve always had the right people guiding us through the different phases of the company.”

What is your vetting process for domestic workers?

We do interviews with employers and interviews with workers. Our team is working from experience and is able to quickly pick up on people and what employers are looking for. The focus is on the type of management style that a worker would respond to and the type of management style an employer would tend to have. A worker can have all of the qualifications in the world, but if they’re not the right fit in a certain family then we don’t match them to that employer. In our interviews we basically try to identify which type of style workers will be the most responsive to and then we pull out the workers that we don’t think are ready to be successful employees. We also vet out employers from the system who we don’t think are ready to be successful employers.

How were you able to build up support and momentum to where you are today?

When we look at our success, it’s so important to look at the people we’ve had. From the beginning, it was me, my brother-in-law David, and Tammy as the co-founders. David is a lawyer by background, teaches at the University of Hong Kong, and is somewhat of a serial social entrepreneur. I met Tammy soon after moving to Hong Kong. She and David both were deeply involved in migrant domestic worker issues already and also saw the need for systemic change in recruitment. Tammy has a background as a CPA at and consultant in the US, Europe and Asia. As you can imagine, the three of us had very different backgrounds and perspectives. We were pulling in all directions, but luckily, we met Jennifer Meehan, who had previously been the CEO of the Grameen Foundation’s work in Asia. She was taking time off and was interested in advising us. After we had been in operation for a few months, Jennifer joined us and had the experience and insight to come in and understand each of our views and pull it all together. It has been a great learning experience to be mentored by David, Tammy, and Jennifer for several years now. The key element about our story is that we’ve always had the right people at the right time.

Second, is our focus on culture with the team. When I come into the office and it doesn’t feel right, I ask everyone how they are and what’s going on. A leader of the company has to be the example of what your culture means, which can be exhausting at times. But that culture has to be established by the leadership bringing the energy and enthusiasm. This market is not an easy one and that’s why we have to stay positive and focus on the solutions we can provide.

Customer service has also been important for our success. I worked in call centers in order to pay for university and so we applied that experience in our customer service. In Hong Kong, this industry has a reputation for terrible service so the bar wasn’t very high. But this is something that we got right from the beginning. We were already exceeding expectations by answering the phone and being respectful. After that, our momentum took off with people recommending us to their friends. Word of mouth is still by far our best marketing tool.

“Becoming the best will then allow us to become the biggest…The business has grown which will allow us to have influence over the market… which then leads to impact. The idea is to set the market standard.”

How supportive is the legislative environment in Hong Kong for reform in the domestic work industry?

Hong Kong has seen some significant progress in the last few years. They’ve enacted laws that have created a new code of conduct for employment agencies. The government cares about it and is trying to improve, but reforms within government tend to be slow moving. The issue of agency fees was not on their radar until recently.

The government in the Philippines is also open and willing to talk with us because we take a non-aggressive approach with them. We believe that most people in government are good people that are trying to do the right thing, but it’s very hard to make fast changes in the public sector. Even people high up in government can’t move as quickly as they want to. We’ve taken a very positive approach and have found that to be very successful. We’ve been impressed with the government’s desire to improve the situation. The reality is that this is a big, tricky problem that has gone on for decades and the new administration has been dedicated to improving it.

Who are some of the people who inspire you in your work? Some of your mentors?

David, Tammy, and Jennifer have all been powerful mentors in different ways. Joanne Oswin is also a mentor who was formerly Chief Operating Officer for PWC for Greater China. We found out she was retiring at the end of last year and approached her to work with us. She joined our board in March and has been a huge addition for the team.

Having mentors is critical and I think that mentorship isn’t always going to be someone who sits down with you once a month. A lot of mentorship for me has been someone I can talk to more frequently so that they can understand the nuance of my decision making. As far as people who have inspired me, I think Muhammad Yunus is amazing and have also learned a lot reading about or listening to podcasts of several entrepreneurs including Reid Hoffman, the founder of LinkedIn.

“We believe that most people in government are good people that are trying to do the right thing, but it’s very hard to make fast changes in the public sector…We’ve taken a positive approach and have found that to be very successful.”

Given demographic growth, what is the future for domestic work and migrant labor at large in Hong Kong?

I recently moved to the Philippines and we’re now moving into other industries beyond domestic work. Migrant labor going forward is going to be gigantic. We’re bullish on how big this market is and will be. If it’s done the wrong way, then these industries will be human trafficking platforms. If it’s done the right way, it will be an amazing tool for poverty alleviation.

We’re seeing changes in demographics around the world where there is demographic ageing in higher income countries and also a slower birth rate. There is going to be increasing need for workers to take care of older people in such countries. We see that places like Hong Kong, Japan, and the U.S. will need more migrant workers over the coming decade or two. How do we ensure that systems are set up that ensure this work is done in an ethical way? Many people are saying that jobs will be lost due to automation, but we also have to consider that a lot of the work that migrant workers do requires a human touch.

What excites me about this problem is that it is entirely solvable. I think in most geographic areas, it can be solved within 10 years. We currently see the problem as employers getting bad service who aren’t happy with the status quo. Workers are being exploited and are not happy with the status quo. The agents in the middle have different incentives at different times and so it’s all about aligning everyone’s incentives. This is where we think we can tweak things relatively quickly as we’ve seen the market in Hong Kong change over the past several years.